Tips To Buy A Second Hand Car in India Using Used Car Loans

Which second hand car should I buy? From where I can get details about the best used car to buy under 2 lakhs? Who are the top brands providing second hand cars in India? How much interest I have to pay in case I want to avail a used car loan in India? If these are the questions running in your mind, then I am sure you are going to get some relief after going through this article.

The market of used cars in India is larger than that of new cars. More than three million used cars are sold each year in the country. Individuals purchase second-hand cars from certified dealers or through referrals.

Reasons For Buying A Used Car In India

One of the biggest reasons for the increase in demand for used cars is affordability. When an individual purchases a new vehicle, he needs to incur additional expenses like insurance, road tax, and loading charges. These expenses are not applicable when a person buys a used car except insurance,which is available at an affordable premium due to lower Insured Declared Value (IDV).

A survey of the second-hand car market showed that some of the most popular brands in the last three years include Honda, Hyundai, and Maruti. For each Honda vehicle sold; three cars of Hyundai and five of Maruti were sold during this period.

According to the study, the average price of a used hatchback is from INR 2.5 lakh to INR 5 lakh. In comparison, a second-hand sedan is priced between INR 4 lakh and INR 9 lakh.

Another reason for the increase in the demand for old vehicles is the easy availability of used car loans. Most banks and non-banking financial companies (NBFCs) offer such loans to potential car buyers.

Top 5 Popular Used Car Brands In India

Here are the four brands that havethe highest demand in the used car segment.

Maruti

Maruti is popular amongstbuyers who prefer lower maintenance. Some of the most demanded models include Alto, Swift, and WagonR.

Hyundai

Several small pre-owned car buyers choose Hyundai vehicles like Santroand Accent. These models are easy to maintain and efficient.

Honda

Individuals who desire a premium-feel mid-sedan at an affordable cost often opt for the Honda City. This vehicle is popular for its style, space, and long-lasting engine performance.

Toyota

Utility vehicles like the Innova and Fortuner are popular amongst buyers looking for spacious interiors, high engine performance,and durability.

Tata

Tata is another most trusted car brand in India. If you are looking for cheapest used car in India, then I am sure you will get within Tata brand only. Although their ranges of cars are not that attractive, but there is no doubt about their car’s performances.

Lenders require minimal documentation, such as income, address and photo identity proof when individuals apply for used car finance. The entire procedure is quick and simple.

Affordability

Why are used car loan rates higher compared to new cars? I think it is obvious that new cars have the highest trust and that’s why banks are ready to offer cheaper car loans compared to user card loans. But still, the difference in interest rate is not alarming or significant.

Pre-owned car loans are available at competitive interest rates. Furthermore, the repayment duration is up to 84 months. The longer tenure and affordable used car loan interest rates enable individuals to service their loan without any constraints.

Higher loan value

Buyers may be able to reduce the initial down payment because lenders often sanction a higher loan amount.

During the last few years, the number of second-hand car buyers has been steadily rising. The affordable prices, easy availability of loans, and the increase in the number of certified dealers have been the propellers for this growth.